Suppose the following information was taken from the 2025 financial statements of FedEx Corporation, a major global transportation/delivery company. (in millions) Accounts receivable (gross) Accounts receivable (net) Allowance for doubtful accounts Sales revenue Total current assets (a) 2025 Answer each of the following questions. Accounts receivable turnover $3,800 Average collection period 3,380 420 2024 $4,500 4,350 30,920 33,420 7,110 150 Calculate the accounts receivable turnover and the average collection period for 2025 for FedEx. (Round answers to 1 decim- place, e.g. 12.5. Use 365 days for calculation.) 7,240 times days
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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